Die-hard patriots claim that shipping in a foreign boss is an act of desperation. Untrue. To recruit the best is good for any business, and there's no shortage of high-grade talent queuing up to come and work in the UK. Andrew Saunders and Matthew Gwyther report
It's a strange phenomenon that we citizens of the UK are not keen on blowing our national trumpet. New Labour's efforts to turn us into 'Cool Britannia' believers were greeted with disdain by the population at large. Never mind the fact that we're running a more buoyant economy than our continental neighbours, with a 26-year unemployment low, rock-bottom interest and inflation rates ... any mention of having it relatively good would be met with wry amusement by most Brits. Anyone fool enough to make references to 'this sceptred isle' or 'this blessed plot' would be laughed out of the room.
We are always keener to complain about our national deficiencies than to praise anything that is promising about UK plc. And yet it is not lost on those from outside who would like to come in that Britain is a good place to live and to work in at the moment. And we are not just talking about the hordes of unfortunates billeted together in the huts of the Red Cross refugee camp at Sangatte. Britain is now experiencing one of the biggest waves of immigration of foreign business people in its history.
The headhunting agency Spencer Stuart has recently produced interesting data about the numbers of non-UK nationals on the boards of our big companies. In 1998, 16% of plc directors in the FTSE-150 were from abroad. By 2000, that figure had risen to 20%, and last year it was up again to a remarkable 23%.
Why is this happening? A major practical reason is probably language. English is fully established as the international language of business. By contrast, the number of foreigners in senior positions in French or German companies is tiny. But the causes go far deeper than that.
For a start, there's the promise of more money. With the euro exchange rate already in the cellar, the prospect of being paid in sterling, at least for the next year or two, must be appealing. And, as revealed in our Global Salary Survey last year (MT, August 2001), UK chief execs are the best paid in Europe, earning an average of pounds 509,019 a year - pounds 126,891 more than their nearest continental rivals just a train ride away in France. Only in the US are the captains of industry paid more.
But according to Paolo Scaroni, Italian chief executive of glass manufacturer Pilkington, size isn't everything when it comes to pay. Scaroni, who comes from Vicenza, has been based in London since 1996 and contends that, although salaries are bigger, it is credibility rather than cash that attracts the best of overseas talent. 'I wasn't particularly looking to move to London,' he says, 'but the top jobs are linked to this location. It's because of the public-company concept. In Italy there are no public companies in the UK sense, not one. There are a few in France, Germany and Holland, but the UK is the place to be if you want to run a public company.'
Public companies tend to be sizable, and the UK certainly has a greater share of heavyweight businesses. In the most recent Wall Street Journal index of Europe's 500 biggest companies, 132 are British, but only 87 are German, 79 French and 35 Italian. The staunch anglophile P-Y Gerbeau, one-time boss of the ill-fated Millennium Dome project, thinks he knows why this is. 'The UK is a far better place than France to do business,' he says from his new base in Milton Keynes, where he now runs an entertainment complex called Xscape. 'Unions and EU work legislation mean that the leisure, retail and entertainment sectors suffer badly in my home country. The entrepreneurial spirit in France is dead - killed by tax and labour laws.'
The hiring of Gerbeau to run the Dome caused widespread amazement. Although much of British industry may be quick to snap up top talent regardless of its origins, some have remained resistant. Pehr Gyllenhammar, the Swedish chairman of insurance giant CGNU, says: 'There is a strong tradition in the financial sector of people from the same background - Eton and Oxbridge - rising to the top. It's about time that London, a very diverse city, had that same level of diversity in senior management. When I became chairman of Commercial Union (as it was in 1997) there was only one other non-Brit on the board.'
Before coming to London, Gyllenhammar had spent nearly 20 years in the driving seat at Volvo, turning it from a local manufacturer into the global brand it is today. Like the people who buy its cars, he values discretion. 'The UK is a very discreet country and I like that. People leave you alone. Pay your taxes, do your duty and you'll never hear from the authorities. In Sweden they have a hand in everything.'
Gyllenhammar's insouciance is not shared by all foreign bosses, however. The long-running fat cat debate about executive pay 'horrifies' some prospective imports. Says Jan Hall of Spencer Stuart: 'I've had foreign candidates for jobs say that they just will not put their families through that kind of personal media intrusion into their remuneration.'
Yet Gyllenhammar likes the openness of the UK board system. 'The unitary board is particular to the UK, and it's a good system. It's resistant to abuse because the directors hold each other to account. The chairman is usually separate from the chief executive and has a more responsible role than in many other countries.'
Responsibilities don't come much heavier than the management of a British professional soccer team. It's a one-strike- and-you're-out career, but there has been a wave of foreign management imports over the past 10 years, both on the pitch and in the dugout. In 1999, Ebbe Skovdahl quit his home country of Denmark for Scotland, to take over the reins at troubled Aberdeen FC. Since its 1980s heyday under Alex Ferguson, the club had been languishing at the foot of the Scottish Premier league. For Skovdahl, landing the manager's job was a dream come true. 'I always wanted to come to the UK. When you are born and raised in a small country, of course you want to put the things you've learned to use in bigger places, where things are on a higher level.'
Thanks to his efforts, Aberdeen has reached a much more comfortable spot nearer the top of the table. But he had a tough time at the beginning and thinks that not being a local helped him to stay the course. 'I was the fifth manager in 18 months, and I had my share of problems to start with - bad results and players who struggled. But the club and fans gave me more space because I was a foreigner.' So much more space that Skovdahl has recently become the longest-serving manager in the Scottish Premiership. He loves life north of the border. 'I couldn't ask for a better place to live. Aberdeen is the oil capital of Europe. Like London, it is an international city and there many nationalities here, including about 50 other Danes.'
George Iacobescu trained as an engineer in Romania before escaping to democracy, freedom and the Canadian construction business Olympia & York, owned by the Reichmann brothers. Brits remember O&Y as the company brought down by building London's tallest tower at Canary Wharf. A rare survivor of the original management team, Iacobescu is now back on top as chief executive of reborn, FTSE-listed Canary Wharf plc. He has no doubt what brought him back to this side of the Atlantic. 'London. Like New York when I was there in the '80s, it attracts people from all over the world. It's the heart of Europe. All roads used to lead to Rome, now they lead to London.'
The dominance of London in the British economy is a source of both strength and weakness. Jan Hall of Spencer Stuart calls it 'a huge draw - one of the best cities in the world and a great source of competitive advantage when it comes to attracting talent.'
Tyler Brule, a Canadian, moved to the UK to become a journalist in 1989 and eight years later sold his London-based Wallpaper magazine to the American publisher Time Warner for pounds 1.15 million. His corporate identity consultancy Wink has just won the business to relaunch the collapsed national airline of Switzerland. 'In a creative industry, London is easily the best place to find talent. Better than Paris or Hamburg,' says Brule.
Like Iacobescu, Brule notes the similarity with how New York felt in the late '70s and early '80s - febrile, harsh, intensely competitive and with a yawning gap separating the haves from the have-nots. 'Kensington and Chelsea plus Westminster is the wealthiest enclave in Europe,' says Brule, 'but London as a whole is one of the poorest.'
It is also a city falling apart at the seams, with media reports of a murder a day this year and a transport infrastructure that is in crisis. And things are likely to get worse if predictions that the capital's population will grow by the equivalent of a city the size of Frankfurt over the next 14 years prove true. 'There is a sense that London succeeds despite itself,' says Brule. 'It's going forward at a pace, but the wheels are falling off.' And he is not impressed by the Government's measures to put things right. 'The proposals are a cack-handed amateur hour. They are far too short-termist - like trying to patch the problem with Band-Aids and masking tape.'
Both Paolo Scaroni and P-Y Gerbeau live in London, although their companies are based elsewhere. Surely Scaroni would live much more cheaply by being closer to Pilkington's HQ in St Helen's, Merseyside? 'When I arrived here, London had to be my base. But I've since discovered that it could have been Chester. It's charming and the quality of life is great, but I didn't know about it before I came to the UK.'
So London it is, and the high cost of living there soaks up most of his extra cash. London is the most expensive city in the EU and the 12th most expensive city in the world. Milan - Italy's priciest neighbourhood and Scaroni's Mediterranean home base - ranks a thriftier 58th.
We may envy the lifestyle of our continental neighbours, but the coin has a flip side: they have a lot to learn from us when it comes to grafting. Not only do we put in more time at work than any of our EU neighbours - an average 40 hours a week - but our flexible employment regime is streets ahead too. Says Iacobescu: 'If you are French, German or Italian, for example, it's good for your career to spend time in the UK. There's a valuable work ethic and method of doing things here that you don't get elsewhere. Working practices are years in advance of those in the rest of Europe.'
For Beverly Malone, formerly US deputy assistant secretary for health in the Clinton administration and general secretary of the Royal College of Nursing since last June, the decision to cross the Atlantic was partly made for her by the American public. 'I was approached about the RCN job in late 2000, and Mr Bush sealed my decision when he won the presidential election.'
She doesn't regret it. 'What attracted me most was the NHS. It needs fine-tuning, but for an American it's a breath of fresh air to be working in a system where the fact that it is free at the point of use is a given, not even a subject for debate.'
This opinion may not be shared by someone who's just spent six hours on a trolley in A&E waiting to see a doctor, but it's an example of how outsiders can challenge the accepted wisdom - and be more likely to get away with it. 'I don't have the baggage that someone from the UK might bring with them. That gives me a boost,' says Malone.
This, ultimately, must be one of the reasons why inward migration is a good thing for any economy. Fresh blood, with new ways of looking at and doing things, is vital to keep the engine of change running. That is why the most powerful and successful economy on earth belongs to the nation of immigrants, and a major reason why Japan, one of the most closed of cultures, is moribund.
BEVERLY MALONE: Despite hailing from the original land of opportunity, the US-born general secretary of the Royal College of Nursing took up a post here to boost her career. 'There are so many chances in the UK. Coming here has definitely been a good move for me. I'm working internationally now, operating on a different level. The Brits are a really receptive people, and i've been treated graciously without exception.'
PAOLO SCARONI: Pilkington's Italian-born boss applauds the straightforwardness of doing business in Britain. 'The rules are simple. If I create shareholder value, I stay. If not, I don't. In Italy it's far more complicated - the state has a hand in nearly every company, either directly or through the banking system. So if the minister of trade thinks I'm an idiot, that's a problem. Here I just have to perform well.' Pilkington is housed in a purpose-built grade II listed building. dating from 1963, this is one of the earliest and best examples in Britain of a headquarters building on a greenfield site.
EBBE SKOVDAHL: There are aspects of running a football team that hold true wherever you are, says the Danish manager of Scottish premier league side Aberdeen FC. 'Managers are sacked frequently the world over, and boards want to make a profit. But in Aberdeen, the supporters have been fantastic and the club has given me a chance. I like the Scottish sense of humour and their enthusiasm for the game.' The club's stadium is a short walk from the seafront. Clearly, Skovdahl didn't pick Aberdeen for its climate.
TYLER BRULE: The Canadian-born chief executive of Wink Media says of his temporary home: 'I think the UK has a way to go before achieving the 'you can do anything' approach of new world countries like North America AND Australia. But compared to Switzerland, Germany, Sweden or Italy, it's absolutely ahead here. The UK has the best of Europe and most of the positive aspects of the US too.' Brule's office on the north side of Waterloo Bridge is across the Thames from the London Eye.
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